B.N. Firos v. State of Kerala & Ors.
(2018) 9 SCC 220
In the Supreme Court of India
Civil Appeal 79/2008
Before Justice Ranjan Gogoi and Justice Mohan M Shantanagoudar
Decided on March 27, 2018

Relevancy of the case: Copyright ownership of a software developed for the government in the context of Section 70 of the Information Technology Act, 2000 and Section 17 of the Copyright Act, 1957

Statutes and Provisions Involved

• The Information Technology Act, 2000 (Section 70, 70(1))
• The Copyright Act, 1957 (Section 2(k), 2(o), 17, 17(d))

Relevant Facts of the Case

• The Petitioner is BN Firos, the proprietor of Comtech IT Solutions, and a member of the Microsoft Developer Forum (MSD).
• The respondents, the State of Kerala (hereinafter state government), and the Centre for Development of Imaging Technology (C-DIT), conceptualized a bill collection system called ‘FRIENDS’ in 1999.
• Microsoft required the appellant to carry out the system study and develop the pilot project for the same. It was successful and later the C-DIT and the appellant signed an agreement for its customisation.
• The appellant filed for copyright registration of the FRIENDS software. The C-DIT also filed suit, seeking that they are declared sole owner of the IP of the FRIENDS application.
• Meanwhile, the State Government issued a notification under Section 70(1) of the Information Technology Act, 2000. The appellant challenged this in the High Court, stating that copyright was vested with them under Section 17 of the Copyright Act, 1957. They stated that Section 70 of the IT Act constituted excessive delegation.
• The High Court rejected it on grounds that Section 70 of the IT Act has to be constructed harmoniously with Sections 2(k) and 17(d) of the Copyright Act. Further, that the IPR rights vested in the Government, entitling it to make declarations under Section 70(1) of the IT Act.
• The order is challenged here.

Prominent Arguments by the Advocates

• The petitioner’s counsel argued that under Section 70(1) IT Act (pre-amendment), the power of declaration of ‘protected system’ was an unguided delegation of legislative power, which is shown by its subsequent amendment.
• The petitioner’s counsel also submits that as it developed the software, the appellant is the first owner of the copyright.
• The respondent’s counsel argued that the appellant had developed the software for Microsoft, so under Section 17(a) Copyright Act, Microsoft is the first owner.
• The respondent’s counsel submits that Microsoft made the system available for the respondents, and under Clause 10 of the MoU between C-DIT and the State government, hence, the intellectual property rights vest with the government.

Opinion of the Bench

• The bench believed that Section 70(1) of the IT Act has to be read conjointly with Sections 2(k) and 17 of the Copyright Act. Sections 2(k) and 17(d) of the Copyright Act deal with the possibilities of copyright infringement under Section 70(1) of IT Act. When read conjointly, Section 70 of the IT Act has the rigors to control the operation of Section 70(1).
• The 2009 amendment further circumcises the powers given in the IT Act, 2000; it is not the first introduction of parameters.
• On the face of it, the copyright claim of the appellant fails based on Section 17(a) of the Copyright Act and Clause 10 of the MoU between C-DIT and state government.

Final Decision

• Appeal dismissed.
• Decision of the High Court affirmed.

This case summary has been prepared by Mehula Liza Pallathu, an undergraduate student at National University of Advanced Legal Studies, Kochi, during her internship with The Cyber Blog India in May/June 2021.